Head of local Better Business Bureau rescinds resignation

William Mitchell had tendered his resignation in December amid controversy over the group's rating system and his high salary. In an e-mail to staff, he criticizes the national council and vows to fight to restore his reputation.

The beleaguered head of the local Better Business Bureau, who resigned in December amid controversy over the group's letter-grade rating system and his high salary, has rescinded his resignation and vowed to fight to restore his reputation.

William Mitchell, who made more than $400,000 in 2008 running the Southern California chapter, had resigned in the middle of an audit of the chapter by the National Council of Better Business Bureaus.

But on Monday, he circulated an e-mail to his staff in which he criticized the Washington-based national council, saying executives were trying to take over the Southern California chapter and pack its board of directors with their own people.

Mitchell had tendered his resignation but remained on the job while a successor was sought.

"When I tendered my resignation last month, mainly due to my health, I hoped it would clear the path to better relations between the Council of Better Business Bureaus and the Los Angeles BBB," Mitchell wrote in his e-mail, a copy of which was obtained by The Times. "However, the Council used my resignation as an opportunity to try to put their own people in place of our Board of Directors and to insert their designee as CEO. If this were to happen, Council would effectively control the LABBB and our considerable assets."

He said the board of the local chapter had asked him to rescind his resignation.

"Rest assured that we will pull out all stops to defend ourselves against Council's unlawful overtures," he said in the memo. Executives at the National Council of Better Business Bureaus did not respond to requests for comment.

Nationwide, Better Business Bureaus had been embroiled in a scandal over their now-discontinued practice of giving businesses better grades if they became dues-paying members. The system was based on one devised under Mitchell's leadership of the Southern California chapter, where businesses have long complained that heavy-handed recruitment tactics amounted to a system of pay for play.

The controversy reached its peak last fall when L.A. business owners critical of the BBB obtained high ratings for fake firms immediately after paying membership dues for them. The national organization discontinued the practice and began an audit of the Southern California affiliate.

Mitchell is a 26-year-employee of the Colton-based chapter.

In an interview Tuesday, Mitchell said that if he left, there would be no one to defend the local chapter from pressure from the national organization. And he disputed the contention that the ratings system devised under his tenure was responsible for providing higher grades to companies that were paying members of the BBB.

Rather, he said, the national council altered the system. His system, he said, gave the same grades to those that did not pay as to those that paid — as long as they agreed to abide by the BBB's standards.

"I was the most vocal opponent of that system — I wrote about it extensively," Mitchell said. He also said that his compensation for 2008 — reported to the Internal Revenue Service by the BBB in 2009 — was inflated by vacation pay, bonuses and other payments. His real salary, he said, was closer to $340,000.

The national president of the organization earned $335,000 in 2009, according to IRS documents.